Last Updated: Feb 13, 2018
How do you write an employee handbook for your small business? What do you need to put in it? Whether you’re writing your first employee manual or you’re updating one you’ve had for a while, this article explains the topics you should cover.

Employee handbooks should be designed to do more than just communicate information and answer routine questions; your handbook should help you achieve your organizational goals and objectives. Thus, while a list of rules of conduct and a summary of benefits are important information, you should evaluate your handbook on its ability to help your organization meet its objectives.

One purpose of your employee handbook is to help you attract and retain employees. Your employee handbook should help your employees answer — hopefully in the affirmative — two important questions: “Why should I work here?” and “Why should I continue working here?”  If your employees are not receiving a positive message about your organization, your handbook is not doing its job.

Your handbook should also help convey useful information about hours of work, paydays, leaves of absence, and benefits. More importantly, your handbook should help create an atmosphere of trust and respect and give your employees a sense of belonging.

At the same time, your employee handbook must help you comply with your legal obligations and ethical requirements. It must also help you protect management’s right to make changes and adapt the organization’s policies and programs as needed.  

Since your organization and its employees are affected by all of your written and unwritten policies and procedures, you should ensure that your employee handbook incorporates as many of your organization’s written and unwritten policies and procedures as practical. You must further ensure that your handbook communicates top management’s commitment to your policies. As a result, your handbook will promote consistency and assist you in preventing claims of disparate treatment.

You should regularly assess your employee handbook, not only from the standpoint of how well it communicates policies and procedures, but also from the standpoint of how well it helps you achieve your organization’s goals and objectives. Employee handbooks that fail to help your organization succeed in these areas should be rewritten. 

Below is a recommended list of employee handbook topics:

Section One: General Employment Policies

This is where you define the basic policies that explain how, when and where your employees are expected to work. You may want to include the following information in this section:

All of these elements are important in their own way. Without a non-disclosure agreement, your employee could breach confidentiality and have no idea that they were not supposed to discuss a topic outside of work. Without a conflict of interest policy, you might have an employee seek a business relationship with another organization that puts your operation at risk, yet have no recourse as your policy was not spelled out. Therefore, it is important to include most, if not all, of the sections above in your employee handbook.

Section Two: Employment Status

This is another category that is important in your employee handbook. You may want to include the following two sections:

Section Three: Recruiting and Hiring

Your employee handbook should lay out the ins and outs of your employees’ legal obligations during their employment at your organization as well as your process for recruiting and onboarding. At a minimum, you need to cover your policy on eligibility to work in the U.S. The following categories are also recommended, but not required:

Section Four: Compensation and Salary Administration

Include the following items in this section:

These items are also recommended:

Section Five: General Workplace Policies

What time should I show up for work? What is the dress code? How many breaks can I take? Spell this out. In order to ensure the best work ethic and safe work environment, you may want to include the following sections in your employee handbook:

These items can also be helpful:

Section Six: Employee Benefit Programs

You may want to include some or all of the following items in this section, depending on your specific benefits package:

Section Seven: Leave

By creating guidelines of when it is appropriate to paid time off (PTO), vacation, or sick days, your employees will be better able to manage their leave time. Include the following sections in your employee handbook:

The following items can also be helpful:

Section Eight: Organizational Property and Technology

Every organization is different as to whether they allow their employees to use their phone or computer at work, and whether they supply their employees with these tools.  Include the following policies in this section:

The following items can also be helpful in this section:

Section Nine: Employee Performance and Workplace Conduct

How do you expect your employees to behave while at work? What qualifies as misconduct? What kind of performance is considered grounds for termination? How will employee performance be evaluated? Include these policies:

You may also consider adding the following items in this section:

Section Ten: Separation from Employment

Include the following items in this section:

You may also consider including an item on references for current and former employees.

Section Eleven: Employee Acknowledgment Form

Employers often worry that their employee handbooks will be used against them in litigation. In particular, you could be concerned that employees will claim that your policies are contracts that must be followed exactly. However, the simple act of putting your policies in writing should not create a binding contract, if the policies are written as guidelines that explain “generally” or “typically” what your requirements are and how employees “normally” will be treated.

Label your “introductory period” policy carefully. Do not use the traditional phrase “probationary period” with its union security clause connotations. Instead, use you might want to use the term, “introductory period”, meaning that the new employee is being introduced to the organization and that both the employee and the company have the opportunity to evaluate fit.  

Include a clear at-will statement in the policy. An example of an effective statement is: “Your employment with the Company is considered to be at-will, and the employment relationship may be terminated at any time by either party.” Make sure other policies also include appropriate at-will disclaimers. It is not enough to include the at-will statement just in the introductory period policy. You also should have a separate at-will policy and discuss the issue in other policies, such as those addressing hiring, termination, discipline, performance evaluation, and complaint resolution.

No matter the size of your organization, a well-written, up-to-date, legally compliant employee handbook is a best practice that will benefit you and your employees.